FreeMarkets takes a run at the ASP field

In a change of pace, the provider of business-to-business exchanges unveils software that companies can rent to build and operate private marketplaces.

2 min read
FreeMarkets, a provider of business-to-business exchanges, on Thursday unveiled software that companies can rent to build and operate private marketplaces.

Hosted by FreeMarkets, QuickSource is a set of applications that allow a company to create and manage a marketplace independently, rather than handing over responsibilities to a third party.

The new offering marks a change for Pittsburgh-based FreeMarkets, which usually operates as a third-party management center for marketplaces. With QuickSource, the company is taking on the role of an application service provider (ASP), renting software to customers on a subscription basis--and thus providing an alternative to its traditional line of business.

FreeMarkets is looking to broaden its portfolio and provide more than just marketplace technology and services. Last week, it acquired collaborative e-commerce maker Adexa for approximately $340 million.

Online marketplaces, also known as exchanges, come in two forms. Businesses can set up private versions to buy products from their supplier partners, and they can participate in public marketplaces that are open to other companies in an industry.

The ASP concept, meanwhile, has caught on among businesses that find the services provided to be an attractive alternative to installing and maintaining software themselves.

The ASP model isn't for everyone, however. Many providers have run into trouble, with most having a hard time focusing their business model to reach near-term profits and increase their customer base.

That said, analysts consider the business-to-business market fertile ground for ASPs, as marketplaces look to ditch the cost of managing software and to add services to their sites.